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The Olympian Power of PepsiCo

Stocks in this article: PEP MDLZ KRFT

NEW YORK ( TheStreet) -- The Olympics are going strong in Russia and one of the big advertisers, PepsiCo (PEP), will report its quarterly results before the markets open Thursday. Investors hope the company will step up to the winners platform with news of "gold medal" earnings per share and sales growth.

Pepsi's behemoth beverage division is somewhat overshadowed by its even healthier snacks business. Guess who's watching and listening carefully to the earnings call about that segment of Pepsi's operations?
None other than Nelson Peltz, the legendary activist investor.

As I commented in a recent article, early last year Peltz's Trian Management Fund amassed stakes of more than $1 billion in Pepsi and Mondelez International (MDLZ) "apparently with the hope of merging the snacks business of PepsiCo with the fast-growing spin-off of Kraft Foods (KRFT)."

Peltz may have given up on that idea for now but he hasn't stopped criticizing PepsiCo management. Peltz has publicly stated he'll continue to push PepsiCo to spin off its faster-growing snacks unit from its beverage business.

Just the publicity alone helped shares of PEP to almost reach its 52-week high of $87.06 before falling more than 10% to the intraday low of $78.28 on Feb. 4. Shares closed Wednesday at $81.49, down 1.5% for the year to date.

The one-year chart below shows us where the power of Pepsico and its stock price has been, including the most relevant simple moving averages (SMA) of the share price.

PEP Chart
data by YCharts

One thing the chart shows us: Shares have definitely fallen in 2014 below both the 50-day and 200-day moving average prices. Some technicians refer to this as "the death cross" but this hasn't deterred Pepsico's largest investors from holding tight.

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